B-175097, MAY 12, 1972

B-175097, MAY 12, 1972

BID PROTEST - NONRESPONSIVENESS - QUALIFYING WARRANTY PROVISION DECISION DENYING THE PROTEST OF CIRCLE SEAL CORPORATION AGAINST AWARD OF A CONTRACT TO CONSOLIDATED CONTROLS CORPORATION UNDER AN IFB ISSUED BY THE DEFENSE CONSTRUCTION SUPPLY CENTER FOR THE PROCUREMENT OF 80 OXYGEN REGULATORS. INCLUSION OF A "GENERAL WARRANTY" PROVISION IN PROTESTANT'S BID CANNOT BE EXCUSED AS A MINOR INFORMALITY SINCE IT WOULD HAVE LIMITED RIGHTS OTHERWISE RESERVED TO THE GOVERNMENT UNDER THE INSPECTION CLAUSE OF THE CONTRACT. GAO HAS PREVIOUSLY HELD THAT A WARRANTY PROVISION IN THE SOLICITATION IS NOT RESPONSIVE AND MAY NOT BE CONSIDERED FOR AWARD. 156681, JUNE 2, 1965. ACCORDINGLY, THE PROTEST MUST BE DENIED.

TO CIRCLE SEAL CORPORATION:

REFERENCE IS MADE TO YOUR TELEGRAM DATED JANUARY 28, 1972, AND LETTER DATED FEBRUARY 1, 1972, PROTESTING THE REJECTION OF YOUR BID AND AWARD OF CONTRACT NO. DSA700-72-C-3926, DATED DECEMBER 2, 1971, TO THE CONSOLIDATED CONTROLS CORPORATION, EL SEGUNDO, LOS ANGELES, CALIFORNIA, PURSUANT TO INVITATION FOR BIDS NO. DSA700-72-B-1020, ISSUED NOVEMBER 15, 1971, BY THE DEFENSE CONSTRUCTION SUPPLY CENTER, COLUMBUS, OHIO, FOR THE PROCUREMENT OF 80 OXYGEN REGULATORS.

TWO BIDS WERE RECEIVED AS OF NOVEMBER 26, 1971, THE SCHEDULED BID OPENING DATE. THE LOW BID WAS SUBMITTED BY YOUR COMPANY. YOU DID NOT QUOTE A PRICE IN THE BID SCHEDULE WITH RESPECT TO THE FIRST ARTICLE TEST REQUIREMENT. HOWEVER, YOU SUBMITTED A SEPARATE QUOTATION FOR REGULATORS WITHOUT FIRST ARTICLE TESTING. THE QUOTATION WAS SUBMITTED ON A FORM WHICH CONTAINED ON THE REVERSE SIDE THEREOF A NUMBER OF CONDITIONS, INCLUDING A "GENERAL WARRANTY," WHICH PROVIDES AS FOLLOWS:

"SELLER WARRANTS THAT THE ARTICLES FURNISHED HEREUNDER WILL BE FREE FROM DEFECTS IN WORKMANSHIP AND WILL CONFORM TO THE DRAWINGS AND SPECIFICATIONS. SELLER'S LIABILITY FOR DEFECTIVE OR NONCONFORMING ARTICLES IS LIMITED TO THE REPAIR OR REPLACEMENT, WITH RAIL FREIGHT SHIPPING CHARGES IN CONTINENTAL UNITED STATES TO BE PAID BY SELLER, OF SUCH ARTICLES AS TO WHICH IT IS NOTIFIED WITHIN SIX MONTHS AFTER DATE OF SHIPMENT. EXCEPT FOR LATENT DEFECTS, ALL ARTICLES FURNISHED HEREUNDER SHALL BE DEEMED TO BE FINALLY ACCEPTED BY BUYER UNLESS SELLER RECEIVES NOTICE OF REJECTION WITHIN A REASONABLE TIME BUT NO LATER THAN 90 DAYS AFTER THE RECEIPT OF ARTICLES BY BUYER. AS TO LATENT DEFECTS, BUYER MAY REJECT WITHIN THE WARRANTY PERIOD. THERE ARE NO WARRANTIES BEYOND THE DESCRIPTION ON THE FACE HEREOF. SELLER SHALL NOT BE RESPONSIBLE FOR CONSEQUENTIAL DAMAGES."

IN A LETTER DATED DECEMBER 28, 1971, YOU WERE INFORMED BY THE CONTRACTING OFFICER THAT THE GENERAL WARRANTY PLACES AN ABSOLUTE LIMITATION OF SIX MONTHS AFTER DELIVERY ON THE GOVERNMENT'S RIGHT TO REQUIRE CORRECTION OF DEFECTIVE MATERIAL AND THAT IT LIMITS YOUR LIABILITY FOR DEFECTIVE ARTICLES TO REPAIR OR REPLACEMENT THEREOF, WHEREAS THE INSPECTION CLAUSE OF THE PROPOSED CONTRACT WOULD AFFORD THE GOVERNMENT THE RIGHT TO CONTRACT FOR REPAIR OR REPLACEMENT AND TO ASSESS EXCESS COSTS THEREBY INCURRED, OR TO TERMINATE THE CONTRACT IN ACCORDANCE WITH THE "DEFAULT" CLAUSE. YOU WERE ALSO ADVISED THAT YOUR CLAUSE PLACES A 90-DAY LIMITATION ON THE GOVERNMENT'S RIGHT TO REVOKE ACCEPTANCE FOR FRAUD OR GROSS MISTAKE AMOUNTING TO FRAUD; AND THAT IT NEGATES THE GOVERNMENT'S RIGHT TO RECOVER FOR CONSEQUENTIAL DAMAGES. THE CONTRACTING OFFICER STATED THAT YOUR INCLUSION OF THE "GENERAL WARRANTY" PROVISIONS AS A PART OF YOUR BID REQUIRED THE REJECTION OF THE BID BECAUSE OF ITS FAILURE TO CONFORM TO THE REQUIREMENTS OF THE INVITATION FOR BIDS.

IN YOUR LETTER OF FEBRUARY 1, 1972, YOU CONTEND THAT THE AWARD WAS NOT MADE AT THE LOWEST OFFER BY A RESPONSIBLE BIDDER; THAT THE BASIS FOR SETTING ASIDE YOUR BID WAS FALLACIOUS; AND THAT THE PROVISIONS OF SECTIONS 2-405 AND 2-406 OF THE ARMED SERVICES PROCUREMENT REGULATION WERE INADVERTENTLY OR INTENTIONALLY IGNORED.

YOU SUGGEST THAT THE DEFENSE CONSTRUCTION SUPPLY CENTER'S POSITION RELATIVE TO THE CONDITIONS SET FORTH ON THE REVERSE SIDE OF YOUR QUOTATION FORM HAS NOT BEEN CONSISTENT. YOU REFER TO CONTRACT NO. DSA700-71-C-3864 AS HAVING BEEN AWARDED TO YOUR COMPANY BY THE CENTER WITHOUT QUESTIONING YOUR "BOILER PLATE" PROVISIONS. ALTHOUGH THAT CONTRACT WAS NEGOTIATED, YOU STATE THAT, IF THE CENTER HAD CONSISTENTLY OPPOSED THE PROVISIONS OF YOUR "GENERAL WARRANTY," IT WOULD HAVE ASKED FOR THE DELETION OF THE OFFENDING PARAGRAPH, WHICH IT DID NOT DO. IT IS ALSO SUGGESTED IN YOUR LETTER THAT THE SIGNING OF THE COMPLETE BID INCLUDED THE ACCEPTANCE OF ALL PROVISIONS INCLUDED THEREIN AND THAT, IF THE CONTRACTING OFFICER AND THE LEGAL OFFICER FELT THERE WAS A CONFLICT, THE PROPER ACTION BY THE CONTRACTING OFFICER WOULD APPEAR TO BE OUTLINED IN ASPR 2-405 AND 2-406, WHICH MAKE SPECIFIC PROVISION FOR ERRORS, OMISSIONS OR INADVERTENT CONFLICTS. IT IS CONTENDED THAT APPLICATION OF THE ASPR PROVISIONS WOULD HAVE RESULTED IN A FINDING THAT YOUR OFFER WAS COMPLETELY RESPONSIVE.

THE CONTRACTING OFFICER HAS REPORTED THAT THE QUOTATION FORM USED BY YOUR COMPANY IN CONNECTION WITH THE AWARD OF CONTRACT NO. DSA700-71-C 3864 DOES NOT CONTAIN THE "GENERAL WARRANTY" PROVISIONS. IN ANY EVENT, THE CONTRACT APPEARS TO HAVE BEEN AWARDED ON THE BASIS OF A PROPOSAL SUBMITTED IN ACCORDANCE WITH THE GOVERNMENT'S CONTRACT NEGOTIATION PROCEDURES, AND NOT PURSUANT TO FORMAL ADVERTISING WHICH IS MORE RESTRICTIVE SO FAR AS CONCERNS THE NECESSITY THAT A BID BE RESPONSIVE IN ALL MATERIAL RESPECTS AS OF THE SCHEDULED BID OPENING TIME IN ORDER TO QUALIFY FOR AWARD.

ALTHOUGH YOU SUBMITTED A SIGNED BID, THE QUOTATION FORM SUBMITTED WITH THE BID CONTAINED INFORMATION AND PRICING WHICH NORMALLY WOULD HAVE BEEN FOR INSERTION AT PAGE 9 OF THE BIDDING SCHEDULE AND UNDER SUBPARAGRAPH (G) OF CLAUSE C27A IN THE BIDDING SCHEDULE AT PAGE 7. IN OUR OPINION, THE QUOTATION AND THE CONDITIONS ON THE REVERSE SIDE OF THE QUOTATION FORM CONSTITUTED A PART OF YOUR BID AND THEY WERE PROPERLY CONSIDERED AS SUCH BY THE CONTRACTING OFFICER WHEN IT WAS DETERMINED THAT YOUR BID SHOULD BE REJECTED. IN THE CIRCUMSTANCES, IF THE BID HAD BEEN ACCEPTED WITHOUT REQUIRING THE DELETION OF YOUR "GENERAL WARRANTY" PROVISIONS, THE LIABILITY OF YOUR COMPANY FOR DEFECTIVE MATERIAL APPARENTLY WOULD HAVE BEEN LIMITED TO THE EXTENT PROVIDED IN THE "GENERAL WARRANTY."

ASPR 2-406 CONCERNS MISTAKES IN BIDS WHICH HAVE REFERENCE TO BID PRICES AND NOT TO THE SEVERAL CATEGORIES OF MISTAKES WHICH MIGHT OCCUR IN CONNECTION WITH THE SUBMISSION OF UNRESPONSIVE BIDS. IT IS OUR OPINION THAT AN ALLEGATION OF ERROR UNDER ASPR 2-406 WOULD BE PROPER FOR CONSIDERATION ONLY IN CASES WHERE THE BID AS SUBMITTED IS RESPONSIVE TO THE INVITATION AND IS OTHERWISE PROPER FOR ACCEPTANCE. SEE 38 COMP. GEN. 819 (1959).

ASPR 2-405 DEFINES A MINOR INFORMALITY OR IRREGULARITY IN BID AS ONE WHICH IS MERELY A MATTER OF FORM OR IS SOME IMMATERIAL VARIATION FROM THE EXACT REQUIREMENTS OF THE INVITATION FOR BIDS, HAVING NO EFFECT OR MERELY A TRIVIAL OR NEGLIGIBLE EFFECT ON PRICE, QUALITY, QUANTITY, OR DELIVERY OF THE SUPPLIES OR PERFORMANCE OF THE SERVICES BEING PROCURED.

PARAGRAPH 2-404.2(D) OF THE ARMED SERVICES PROCUREMENT REGULATION PROVIDES IN PART AS FOLLOWS:

"ORDINARILY, A BID SHOULD BE REJECTED WHEN THE BIDDER ATTEMPTS TO IMPOSE CONDITIONS WHICH WOULD MODIFY REQUIREMENTS OF THE INVITATION FOR BIDS OR LIMIT HIS LIABILITY TO THE GOVERNMENT, SINCE TO ALLOW THE BIDDER TO IMPOSE SUCH CONDITIONS WOULD BE PREJUDICIAL TO OTHER BIDDERS.

"A LOW BIDDER MAY BE REQUESTED TO DELETE OBJECTIONABLE CONDITIONS FROM HIS BID PROVIDED THESE CONDITIONS DO NOT GO TO THE SUBSTANCE, AS DISTINGUISHED FROM THE FORM, OF THE BID, OR WORK AN INJUSTICE ON OTHER BIDDERS. A CONDITION GOES TO THE SUBSTANCE OF A BID WHERE IT AFFECTS PRICE, QUANTITY, QUALITY OR DELIVERY OF THE ITEMS OFFERED."

ASPR 2-404.2(D) AND 2-405 ARE SUBSTANTIALLY IN ACCORDANCE WITH THE VIEWS EXPRESSED BY OUR OFFICE IN VARIOUS CASES TO THE EFFECT THAT A BIDDER MAY NOT CHANGE HIS BID AFTER OPENING AND THAT CONTRACTING OFFICERS ARE AUTHORIZED TO WAIVE ONLY INCONSEQUENTIAL OR IMMATERIAL DEFECTS OR VARIATIONS IN BID. IT IS AN ESTABLISHED RULE WITH RESPECT TO FORMAL COMPETITIVE PROCUREMENT BY GOVERNMENTAL AGENCIES THAT THE CONTRACT AWARDED TO THE SUCCESSFUL BIDDER MUST BE THE CONTRACT OFFERED TO ALL BIDDERS. COMP. GEN. 535 (1957), 38 ID. 508 (1959). THEREFORE, ONLY MINOR DEFECTS OR VARIATIONS IN BID WHICH DO NOT MATERIALLY AFFECT THE SUBSTANCE OF THE BID MAY BE WAIVED. THERE IS NO AUTHORITY FOR THE WAIVER OF MATERIAL EXCEPTIONS TO SPECIFICATIONS IMPOSED BY BIDDERS. THERE IS ALSO NO AUTHORITY TO WAIVE CONDITIONS IN A BID WHICH RESERVE RIGHTS AND IMMUNITIES FROM RESPONSIBILITY NOT EXTENDED TO ALL BIDDERS IF IT CLEARLY APPEARS THAT SUCH RESERVATIONS MATERIALLY AFFECT THE SUBSTANCE OF THE BID. SPECIFICALLY, WE HAVE HELD THAT A BID WHICH INCLUDES A WARRANTY PROVISION VARYING MATERIALLY FROM THE EQUIVALENT PROVISION IN THE SOLICITATION, IS NOT RESPONSIVE AND MAY NOT BE CONSIDERED FOR AWARD. B-156681, JUNE 2, 1965.

SINCE YOUR "GENERAL WARRANTY" WOULD HAVE HAD THE EFFECT OF LIMITING RIGHTS WHICH OTHERWISE WOULD HAVE BEEN GRANTED TO THE GOVERNMENT UNDER THE INSPECTION CLAUSE OF THE CONTRACT, AND THE RESERVED RIGHTS AND IMMUNITIES UNDER THE "GENERAL WARRANTY" PROVISIONS ARE SUCH THAT THEY COULD NOT REASONABLY HAVE BEEN CONSIDERED AS IMMATERIAL VARIATIONS FROM THE EXACT REQUIREMENTS OF THE INVITATION FOR BIDS, WE WOULD NOT BE WARRANTED IN TAKING EXCEPTION TO THE CONCLUSION OF THE CONTRACTING OFFICER THAT YOUR BID SHOULD BE REJECTED AND AWARD MADE TO THE CONSOLIDATED CONTROLS CORPORATION.

ACCORDINGLY, YOUR PROTEST IS DENIED.